investor presentation, september 2020 · 2020. 9. 1. · investor presentation, september 2020....

Chart IndustriesINVESTOR PRESENTATION, SEPTEMBER 2020

Forward-Looking StatementsCERTAIN STATEMENTS MADE IN THIS PRESENTATION ARE FORW ARD -LOOKING STATEMENTS W ITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORW ARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING THE COMPANY’S BUSINESS PLANS, INCLUDING STATEMENTS REGARDING COMPLETED ACQUISITIONS, COST SYNE RGIES AND EFFICIENCY SAVINGS, OBJECTIVES, FUTURE ORDERS, REVENUES, MARGINS, EARNINGS OR PERFORMANCE, LIQUIDITY AND CASH F LOW , CAPITAL EXPENDITURES, BUSINESS TRENDS, GOVERNMENTAL INITIATIVES, INCLUDING EXECUTIVE ORDERS AND OTHER INFORMATION TH AT IS NOT HISTORICAL IN NATURE. FORW ARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY TERMINOLOGY SUCH AS "MAY," "W ILL," "SHOULD, " "COULD," "EXPECTS," "ANTICIPATES," "BELIEVES," "PROJECTS," "FORECASTS," “OUTLOOK,” “GUIDANCE,” "CONTINUE," “TARGET,” OR THE NEGATIVE OF SUCH TERMS OR COMPARABLE TERMINOLOGY.

FORW ARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION OR IN OTHER STATEMENTS MADE BY THE COMPANY ARE MADE BASED ON MANAGEMENT'S EXPECTATIONS AND BELIEFS CONCERNING FUTURE EVENTS I MPACTING THE COMPANY AND ARE SUBJECT TO UNCERTAINTIES AND FACTORS RELATING TO THE COMPANY'S OPERATIONS AND BUSINESS EN VIRONMENT, ALL OF W HICH ARE DIFFICULT TO PREDICT AND MANY OF W HICH ARE BEYOND THE COMPANY'S CONTROL, THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE MATTERS EXPRESSED OR IMPLIED BY FORW ARD -LOOKING STATEMENTS. FACTORS THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORW ARD -LOOKING STATEMENTS INCLUDE: THE COMPANY’S ABILITY TO SUCCESSFULLY INTEGRATE RECENT ACQUISITIONS AND ACHIEVE THE ANTIC IPATED REVENUE, EARNINGS, ACCRETION AND OTHER BENEFITS FROM THESE ACQUISITIONS; RISKS RELATING TO THE RECENT OUTBREAK A ND CONTINUED UNCERTAINTY ASSOCIATED W ITH THE CORONAVIRUS (COVID-19) AND THE OTHER FACTORS DISCUSSED IN ITEM 1A (RISK FACT ORS) IN THE COMPANY’S MOST RECENT ANNUAL REPORT ON FORM 10 -K FILED W ITH THE SEC, W HICH SHOULD BE REVIEW ED CAREFULLY. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORW ARD-LOOKING STATEMENT.

THIS PRESENTATION CONTAINS NON-GAAP FINANCIAL INFORMATION, INCLUDING EBITDA, EBITDA, ADJUSTED, ADJUSTED GROSS PROFIT,ADJUSTED GROSS PROFIT MARGIN, AND ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. FOR ADDITIONAL INFORMATIONREGARDING THE COMPANY'S USE OFNON-GAAP FINANCIAL INFORMATION, AS WELL AS RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURESTO THE MOST DIRECTLY COMPARABLE FINANCIAL MEASURES CALCULATED AND PRESENTED IN ACCORDANCE W ITH ACCOUNTING PRINCIPLESGENERALLY ACCEPTED IN THE UNITED STATES ("GAAP"), PLEASE SEE THE PAGES AT THE END OF THIS NEW S RELEASE. WITH RESPECT TO THECOMPANY’S 2020 AND 2021 FULL YEAR EARNINGS OUTLOOKS, THE COMPANY IS NOT ABLE TO PROVIDE A RECONCILIATION OF THE ADJUSTEDEARNINGS PER DILUTED SHARE BECAUSE CERTAIN ITEMS MAY HAVE NOT YET OCCURRED OR ARE OUT OF THE COMPANY’S CONTROL AND/ORCANNOT BE REASONABLY PREDICTED. FURTHERMORE, NON-GAAP FINANCIAL MEASURES SHOW N IN THE PRESENTATION SLIDE LABELED“EXTERNAL SEGMENTATION” W ERE NOT RECONCILED TO THE COMPARABLE GAAP FINANCIAL MEASURES BECAUSE THE GAAP MEASURES WOULDREQUIRE SIGNIFICANT EFFORT TO PREPARE AND THEREFORE ARE NOT AVAILABLE AS OF THE TIME OF THIS NEW S RELEASE.

CHART INDUSTRIES, INC. IS A LEADING INDEPENDENT GLOBAL MANUFACTURER OF HIGHLY ENGINEERED EQUIPMENT SERVICING MULTIPLEAPPLICATIONS IN THE ENERGY AND INDUSTRIAL GAS MARKETS. OUR UNIQUE PRODUCT PORTFOLIO IS USED IN EVERY PHASE OF THE LIQUIDGAS SUPPLY CHAIN, INCLUDING UPFRONT ENGINEERING, SERVICE AND REPAIR. BEING AT THE FOREFRONT OF THE CLEAN ENERGYTRANSITION, CHART IS A LEADING PROVIDER OF TECHNOLOGY, EQUIPMENT AND SERVICES RELATED TO LIQUEFIED NATURAL GAS, HYDROGEN,BIOGAS AND CO2 CAPTURE AMONGST OTHER APPLICATIONS. W E ARE COMMITTED TO EXCELLENCE IN ENVIRONMENTAL, SOCIAL ANDCORPORATE GOVERNANCE (ESG) ISSUES BOTH FOR OUR COMPANY AS W ELL AS OUR CUSTOMERS. W ITH OVER 25 GLOBAL LOCATIONS FROMTHE UNITED STATES TO ASIA, AUSTRALIA, INDIA, EUROPE AND SOUTH AMERICA, W E MAINTAIN ACCOUNTABILITY AND TRANSPARENCY TO OURTEAM MEMBERS, SUPPLIERS, CUSTOMERS AND COMMUNITIES. TO LEARN MORE, VISIT WWW.CHARTINDUSTRIES.COM.

© 2020 Chart Industries, Inc. Confidential and Proprietary 2

http://www.chartindustries.com/

Focused Strategy Supports Clean Energy Targets

3© 2020 Chart Industries, Inc. Confidential and Proprietary

A

BD

C

1. Market

Trends

2. Profitable

Growth

E

Community & Employees

• Environmental, Social & Governance

• Building capabilities to support

other strategic pillars

• Branding

Thinking Disruptive

• Alternative business

models

• Smart products (IOT)

Margin Expansion

• Strategic location manufacturing

• International manufacturing for

traditional US products

• 80/20

• Strategic sourcing

Innovative Solutions

• Upfront Engineering

• Partnerships for new turnkey

solutions

• Retrofit for efficiencies existing

brownfield sites

Broadest Product Offering for Industrial Gas & Energy

• Application and Customer Expansion

• Cryo-pump opportunity

• Repair & Service

• Specialty Markets

*Blue areas (A through J) are applications for

which Chart has existing products and solutions

Broadest Product Offering for Industrial Gas and Energy


Brazed Aluminum Heat

Exchangers

Packaged Gas SystemsCryogenic Bulk

Storage Tanks

Cryogenic Launch

Umbilicals & Storage

Nitrogen Dosing & Food

Preservation

LNG Virtual Pipeline

SolutionsServicing & Repairs

Vaporizers

Gas Pre-Treatment and

Nitrogen Rejection Units

Fueling StationsHLNG

Vehicle Tanks

Cold Boxes

Cryogenic Transport

TrailersLNG by Rail

Integrated Energy

Systems

Cryogenic Storage &

Regasification SystemsLifecycle Services

FEMA Valve Portfolio

Air Cooled Heat

ExchangersAxial Flow Fans

Specialty Pressure & Heat

Transfer Equipment

Staying Focused on Our Strategy


Acquisition of

Hudson

Products

Acquisition of

Skaff

Acquisition of

VRV

Sale of CAIRE

Medical

September 2017 January 2018 November 2018 December 2018 July 1, 2019 August 2020

Acquired

Harsco’s Air-X-

Changers

Business

Broadest product offering for

the markets we serve including

repair and service

Engineering capabilities with

product and solution

innovation

Reduce costs through

operational excellence

Offer highly responsive,

economical service solutions

to our customers

Take Advantage of Favorable

Market Trends

Deliver Profitable Growth Through

Strategic Initiatives

Achieve Financial Targets

Announced Sale

of CryoBio

Business

Definitive Agreement to Sell Cryobiological Products


Deal Terms

and

Economics

Chart

Balance

Sheet

• Cryobiological products (excludes medical oxygen related products)

• Strategic buyer: Cryoport, Inc (NASDAQ: CYRX)

• Purchase price: $320 million cash and no financing contingency

• EBITDA Multiple: 11.7X (average 2-year standalone EBITDA)

• Expected close: Q4 2020; subject to customary closing conditions, including HSR

• July 31, 2020 pro forma net leverage ratio of 1.78X

• July 31, 2020 cash on hand of $130.3 million

• July 31, 2020 net debt of $678.8 million

Why Are CryoBio Products Not Core to Chart?


Cryoport is strategically focused on offering the most comprehensive temperature-

controlled supply chain for the life sciences; Chart is positioned to serve the clean energy

transition and specialty markets which are encompassed in industrial gas and renewable

fuel sources (not life sciences)

Virtually no overlapping

customers with industrial

gas or energy

High regulatory and

compliance requirements;

higher risk profile than the

rest of Chart

All functions and mfg sites

are standalone

Requires different (non-

core) strategy and target

markets to grow above

2%/year

Different supplier base than

the rest of Chart products

Working capital as a % of

sales of 22% compared to

rest of Chart of 15%

8

Cryo Tank Solut ionsHeat Transfer Sys tems

$217

Global Commercial Team

$275 $80 $66

* $ in millions, excludes $7.3M in intersegment eliminations.

1H20

Revenue*

© 2020 Chart Industries, Inc. Confidential and Proprietary

Repa ir, Service & Leas ing

• Air Cooled Heat Exchangers (ACHX),

• Brazed Aluminum Heat Exchangers (BAHX)

• Cold Boxes

• Nitrogen Rejection Units (NRU)

• Integrated systems

• High Efficiency Flow Fans

• Bulk and Micro Bulk Storage Tanks

• ISO Containers

• Packaged Gas Systems

• Fueling Stations

• Non-specialty mobile equipment

• Vaporizers

• Repair and service

• Aftermarket parts and maintenance

• Global Leasing

• Installations

• Full lifecycle

• Dosing equipment

• HLNG vehicle tanks

• LNG by Rail (Gas By Rail Offering)

• Hydrogen equipment

• Cannabis products

• FEMA Valves / FLOW Meters

Spec ia l ty Products

Upon Close, Contemplated External Segmentation

Proceeds of $320M Further Position Us In Our Diverse Future Growth Markets


• Post close expected cash on

hand of $130 million

• Pro forma July 31, 2020 net

leverage ratio utilizing

proceeds for debt paydown of

1.78

• Capital Expenditures for

productivity and growth

• Talent and R&D in hydrogen,

Biogas, Carbon Capture

• Expand Profitable growth

areas of repair, service,

leasing and specialty markets

• Partnerships, equity

investments and joint

ventures in hydrogen to

complete a full value chain

solution without having to own

aspects of the value

• Cryogenic pump

Balance Sheet Impact Organic Investments Inorganic Investments

#1 = Global Clean Energy

Infrastructure Buildout

#2 = Specialty Markets, Repair,

Service & Leasing

Don’t Ignore the Foundation: Customer Stickiness5 New Agreements Signed Quarter to Date Q3 2020


MOUs / LOCs LTAs / Agreements Complete LTAs in negotiation LOIs Partnerships

ExxonMobil India LNG and

IOCL

HLNG Customer 1 (2019) IG Major B (Bulk) IG Major (A) Bulk &

Lifecycle

FirstElement

IOCL HLNG Customer 2 (2019) IG Major (B) Lifecycle MIT tanks ForzeH2

Risco Energy IG Major (A) Vaporizers Eagle Jax ssLNG

Energy Capital Vietnam (ECV) IG Major (A) PRS Shell German stations

AG&P Matheson FirstElement

Major IG Asia Hydrogen

Development

Praxair PRS

Air cooler enterprise frame

agreement

Gasum repair & service

Liquind Agreement for Fueling

Stations

Baywa Agreement for Fueling

Stations

Master Agreement with Flint Hills

Resources for air coolers

*Red italicized text denotes signing or extension was completed already in Q3 2020

**Green italicized text indicates where we have line of sight to execute this agreement in 2020


Global Infrastructure Buildout: Chart 3 Year Opportunity

MID-SCALE LNG EXPORT TERMINALS

MARINE TRANSPORT

LNG IMPORT, SSLNG AND REGAS

LNG BY ROAD

LNG BY RAIL

VIRTUAL PIPELINES

LNG FUEL

STATIONS

>$750M

>$50M

>$50M

>$25M

>$250M

>$175M

>$750M

Discipline: Where We Play In the Hydrogen Supply Chain

VEHICLE FUEL

STATIONS

FUELING

SYSTEMS FOR

AEROSPACE

MARINE FUEL

ELECTRONICS

MANUFACTURING

ELECTRICITY

GENERATION

AMMONIA

PRODUCTION

(FERTILIZERS)

REFINING

CRYOGENIC

LIQUID

TANKS

LIQUID TRANSPORT

TRAILERS, ISO

CONTAINERS, RAIL

CARS, MARINE

TRANSPORT

LIQUEFACTION DISTRIBUTION STORAGE

ELECTROLYSIS

RENEWABLE

ENERGY

POWER GRID

GASIFICATION/

REFORMATION BIOMASS

BIOGAS

NATURAL GAS

BYPRODUCT

INCLUDING

LARGE

CRYOGENIC

STORAGE,

BAHX, LOAD-

OUT SYSTEMS

KEY COMPONENTS INTEGRATED WITHIN SYSTEMS

Pumps and Compressors

Flowmeters

Vacuum Insulated Piping

Valves and Sealing

Connections

Regulators

Sensors

High Pressure Storage

EQUIPMENT USED BY

END CUSTOMERS

PRODUCTIONUSERS OF HYDROGEN

(EXAMPLES)

Expanding Our Hydrogen Offering

13

Application/Technology Chart

Production Liquefaction ✓

Transport Cryo Liquid Container ✓

Flowmeters ✓

Storage Cryo Tank ✓

Refining Cryo Storage & Regasification ✓

Ammonia/

Methanol

Cryo Storage & Regasification ✓

Industrial Cryo Storage & Regasification ✓

Fueling Liquid Storage FCEV Fuel Station ✓

Fork Truck Fuel Station ✓

FCEB Fuel Station ✓

Aerospace ✓

Station Monitoring and Support (EU) ✓

Station Monitoring and Support (Other) ✓

Power Gen Cryo Storage & Regasification ✓

Energy Storage Cryo Storage & Regasification ✓

Mobility Vehicle Fuel Tanks (Liquid) ✓

Organic Dev LH2 pump NPD

Organic Dev LH2 vehicle tanks NPD

Organic Dev LH2 transport NPD

Organic Dev Hydrogen liquefaction NPD

Organic Dev Hydrogen filling station for class 8 trucks in Europe NPD

Organic Dev Hydrogen insulation improvement NPD

Near-term commercial

opportunities underway in the

Americas, EMEA and China:

• Marine LH2

• Onsite hydrogen generation

• H2/LHY fueling stations

• Hydrogen trailers

• H2 plant expansions

• Onboard vehicle storage



Micro LNG & Storage for Biogas Gaining Traction

Truck Loading Skid

Pump Skid

Storage

Tank

Storage

TankPressure

Build

Cold Box

Air Cooled HX

Air Cooled HX

LNG Storage

Tanks

Cold Box

Pump Skid

Truck Loading

Skid

Repair, Service & Leasing

15

Expanding Leasing Fleet Is Another Lever in Profitable Growth

2019 2020 2021

• Limited leasing inventory

available only East Coast

USA

• Revenue of ~$1M for the

full year

• Limited connectivity

between commercial

resources and leasing

team

• Expanded leased inventory

fleet in both USA and

Europe

• Mobile equipment, ISO

containers and dosers

driven by customer

demand/requests while not

cannibalizing OEM sales

• Established Global leasing

group

• Over $11 million of new 5 and 7

year leases signed since June 1,

2020

• Expected revenue of ~$10 - $15M



▪ Our water and wastewater treatment process is a safe and

natural method that avoids chemical treatments while

improving efficiency and reducing costs

▪ Last year, Chart products treated over one billion gallons of

water a day in the U.S.

Clean Water and Sanitation

▪ Our equipment produced over 45 million tons of LNG to

replace coal fired power generation outside the US last year

while helping to reduce 120 million gallons of diesel used in

power generation in the Caribbean and Europe

▪ We helped to eliminate over 40 million tons of coal used in

US power generation last year

Affordable and Clean Energy

▪ All of Chart’s products and technology help our customers

achieve their carbon-neutral sustainability goals

▪ We helped eliminate nearly 250 million pounds of PET

(plastic) used in water bottles in the US last year

▪ Our products helped reduce over 350 million liters of diesel

used by trucks

Sustainable Cities and Communities

▪ We continuously improve energy efficiency and reduce

energy consumption in our operations, including recently

installing solar panels at certain facilities

▪ We’re actively involved in the global energy transition and

work to educate as a member of the Carbon Capture

Coalition and Hydrogen Council

Climate Action

Doing our Part to Achieve United NationsSustainable Development Goals

In Many Cases, We Help Our Customers With ESG Through Specialty Products


Specialty Market Highlight: Water Treatment


US Wastewater Treatment Facilities14,748 wastewater treatment facilities operate in the

United States

▪ Products: Chart provides key equipment for

aeration, disinfection, and pH control of

wastewater and drinking water facilities

▪ Future Expected Demand:

▪ Demand on treatment plants will grow

23% by 2032

▪ $271 billion of capital investments are

expected to meet demands on the

nation’s wastewater and storm water

systems

▪ $472.6 billion will be invested in drinking

water facilities over the next 20 years

Full Year 2020 Guidance


Revenue

$1.3B to $1.4B

Includes $100M of Calcasieu

Pass

Diluted Adjusted EPS

$3.00 - $3.50

Assumes 19% ETR

Capital Expenditures

$30M to $35M

Revenue

Approximately $1.2B


Pass


Approximately $2.25

Assumes 19% ETR


$30M to $35M

Prior Guidance Current Guidance Current Guidance:

• Does not include additional growth

or earnings from the organic and

inorganic investments referenced

earlier in the presentation

• Does not include ongoing interest

expense savings of ~$8.5M

annually (~$0.17-$0.20 of earnings

per share)

• Does not include full year annual

savings beginning 1/1/2021 for

lower insurance premiums, lower

legal costs

• Does not reflect a significant

effective tax rate reduction

resulting from the sale

Free Cash Flow

$120 to $140M

2021 Outlook


Revenue

$1.25 to $1.325B


Pass


$2.90 to $3.25

Assumes 18% ETR


$30M to $35M

Current Outlook

Free Cash Flow

$175 to $200M

Assumes no additional Big LNG Revenue ($M) Adjusted EPS

2020 Guidance, continuing ops (1) $1,200 $2.25

Calcasieu Gap (75) (0.65) - (0.75)

ssLNG terminals/other petchem 45 – 75 0.27 – 0.45

Base business growth at 3% - 4% 25 – 35 0.17 – 0.24

Air cooled heat exchanger recovery 15 – 35 0.05 – 0.15

Specialty products, LRS at 10% 35 – 45 0.25 – 0.35

Incremental restructuring savings

offset by engineering investment

0.45

Interest expense savings 0.15 – 0.17

2021 Outlook, continuing ops (2) $1,250 - $1,325 $2.90 - $3.25

(1) Excludes full year cryobiological products

(2) Does not include any additional Big LNG; embeds effective tax rate benefit into each row

of adjusted EPS

Appendix


EBITDA Reconciliation


Pro Forma 2019 Full Year Financials

23

$M, AdjustedConsolidated

ChartCryoBio

Consolidatedex CryoBio

Sales $1,299.1 $83.6 $1,215.5

Gross Profit 361.8 39.5 322.3

Gross Profit % 27.9% 47.2% 26.5%

SG&A 195.5 6.9 188.6

SG&A % 16.0% 8.3% 15.5%

Operating Income $126.5 $32.6 $93.9

Op Income % 9.7% 38.9% 7.7%

• Does not include additional

growth or earnings from the

organic and inorganic

investments referenced earlier

in the presentation

• Does not include ongoing

interest expense savings of

~$8.5M annually (~$0.17-$0.20

of earnings per share)

• Does not include full year

annual savings beginning

1/1/2021 for lower insurance

premiums, lower legal costs

• Does not reflect a significant

effective tax rate reduction

resulting from the sale


investor presentation, september 2020 · 2020. 9. 1. · investor presentation, september 2020....

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